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50 Everyday Costs You're Overlooking That Are Adding Up

By Christy Bieber - May 14, 2018 at 7:27AM
Man putting his finger through an empty wallet.

50 Everyday Costs You're Overlooking That Are Adding Up

It pays to be more spend-conscious

You work hard to earn money, so it's important to use your dollars wisely. Unfortunately, far too many Americans aren't saving money at all or aren't saving enough, and income is often cited as a reason. While there are some who truly make too little to save, for a lot of us, it's not income that's the problem -- it's spending on unnecessary items.

Everyone's guilty of wasting money sometimes, but when you really sit down and think about it, you'd be surprised at all the little costs you incur on a regular basis. These little costs can add up to a lot of money over the years.

What kind of little costs are we talking about? Read on to find a list of 50 everyday costs many people overlook that add up to a fortune. 



A woman uses scissors to cut up a credit card.

1. Credit card interest

At the end of 2017, American households collectively owed $834 billion in credit card debt, according to the Federal Reserve Bank of New York. Around a third of the American households with credit card debt regularly make payments at or near the minimum. This a big problem, especially since the average credit card balance in indebted households was $15,983 in 2017, according to Nerdwallet.

If you make a minimum payment equal to 2% of the card's balance and your card has a 15% interest rate, it would take you 45 years to repay $15,983 and it would cost you more than $26,000 in interest. This is a huge waste of money that could have been used towards a home down payment, buying a new car in cash, or investing for retirement.

The only solution is to become debt free and commit to paying off your credit card balance every month. You can use a balance transfer or personal loan to reduce interest to make payoff easier and should make a budget that includes paying extra each month to your debts.

If you make payments of $500 monthly on that $15,983 in credit card debt, you could have it paid off in four years with just $4,549 in interest. That's a total savings of more than $21,000. With savings like this, it's even worth considering a side hustle to get that debt repaid if necessary.

ALSO READ: Why You Might Not Be Getting the Credit Card Interest Rate You Deserve



Hands hold a bubble with an illustrated house inside it.

2. Private mortgage insurance

More than half of all home buyers put down less than a 20% down payment on their homes between 2012 to 2017, and 60% of first-time home buyers had a down payment of 6% or less, according to the National Association of Realtors.

Here's the problem: if your down payment isn't at least 20%, you'll be required to pay private mortgage insurance. PMI protects your mortgage lender if you don't pay -- it provides no protection for you -- and fees typically range from 0.3% to 1.5% of the original loan amount. If you borrow $347,706 -- around what you'd need to buy an average priced new home with a 6% down payment -- you'd pay as much as $5,215 annually. That's almost enough to fully fund an IRA.

Your best option is to save 20% to buy your home so you don't incur these costs and won't worry about owing more than your house is worth if property values fall.

If you already have PMI, find out if your home has gone up in value enough to ask your lender to remove it. Lenders must drop PMI once your loan balance falls to 78% of the original value of your home, but you can request PMI be removed once your mortgage balance falls to 80% of what your home is currently worth. When home prices rise, you may reach this 80% loan-to-value ratio quickly. You can obtain an appraisal and request the bank remove PMI sooner to save thousands. 



A bank teller hands a customer some paperwork.

3. Bank fees

According to a MoneyRates survey, the average monthly maintenance fee for a checking account reached $13.24 in 2018, so accountholders would need to pay almost $160 per year just to have an account.

Monthly maintenance fees aren't the only cost consumers pay. ATM fees have risen by 10.7% compared with five years ago, and many banks also charge a host of other fees including for early closure, failing to maintain a minimum balance, returned deposits, foreign transactions, receiving paper statements, and even for going to an in-person teller.

Avoiding fees is challenging, but it's important to read the fine print before signing up for a bank account to find out what costs you'll incur and what you can do to avoid them. For example, you can often avoid a monthly maintenance fee by having your paycheck directly deposited.

Local credit unions may also provide more affordable banking service, as a recent Bankrate survey found 84% of credit union checking accounts don't charge monthly maintenance fees. Fees also tend to be much lower at credit unions for out-of-network ATM use. 



A man looks in his wallet as money flies away.

4. Overdraft charges

Close to a third of Americans with checking accounts are hit with overdraft fees, and consumers who overdraft do so around twice a year on average. The median overdraft fee is more than $34 and many accountholders who overdraft also end up paying extended overdraft fees with median costs of around $15 if they can't put money into the account right away.

Overdrafting your checking account is very costly. It's also something you can avoid. The ideal approach is to leave yourself a cushion of around $500 to $1000 so if you forget you wrote a check, you won't go negative.

Of course, this isn't possible for everyone. If you can't keep a big cushion in your account, careful monitoring is required. Sign up for text alerts most banks offer when your balance is low, keep track of outstanding checks, and check your account balance before making purchases.

Don't assume overdraft protection will help you solve this problem. Most banks charge a fee for overdraft protection, even if it works by having the bank transfer your own money from a backup account. If you have an overdraft line of credit, which allows you to borrow to cover overdrafts, you'll also have to pay interest on the transferred amount in addition to fees. 



piggy bank next to plastic letters that spell out 401k

5. Investment fees

Less than a third of all Americans are aware of what fees they're paying in their 401(k)s, according to a TD Ameritrade survey. Unfortunately, investment fees take a big bite out of your returns. This is true whether the fees are paid for management of your 401(k) or whether you're overpaying for mutual funds, ETFs, or other investment vehicles.

If you invest from age 30 to 65 and earn 7% returns, you'd end up with a nest egg of around $691,000 if you invested with no fees. If you paid 2% fees, you'd end up with around $451,000. And, if you paid fees of 3.5%, you'd have just $333,000 by the time your 65th birthday arrived. That's less than half what an investor with a no-fee portfolio would have. 

It's unrealistic to expect to pay no fees at all, but be careful what you pay. The median “all-in” fee for 401(k) participants was 0.67%, according to a 2014 study conducted by Deloitte Consulting, so if your fees are much higher, talk with HR about whether anything can be done. If it can't, consider investing only enough to get any employer match you're entitled to and putting the rest of your retirement funds in an IRA.

If you buy mutual funds or ETFs, pay attention to fees and expense ratios as you comparison shop for investments.



Document marked Property Tax.

6. Overpriced property taxes

Paying property taxes is a fact of life and an expensive necessity. In fact, American homeowners paid around $278 billion in property taxes in 2016. However, while you must pay taxes, you don't have to pay more than the minimum required.

Taxes are based on your local tax rate multiplied by the assessed value of your home. Unfortunately, assessing homes isn't an exact science, and many homes are overassessed. In fact, the National Taxpayers Union estimates between 30% and 60% of taxable property in the United States is assessed for more than it's worth.

If your home is valued higher than it should be, appeal your assessment to stop wasting money. If you can get it lowered, your tax bill will decline. Appealing usually involves submitting a form; providing proof of your reduced property value, such as appraisal or comparable sales; and sometimes attending a hearing. 

ALSO READ: Here's What the Average American Pays in Property Taxes



Bills with Past Due and Account Closed stamps in red.

7. Late fees

According to the NFCC's Consumer Financial Literacy Survey, 1 in 4 Americans admit to not paying bills on time. Failing to pay by the deadline is a costly waste of money. Credit card issuers can charge up to $25 for a first-time late payment or up to $35 for a second late payment within six months.

While costly, these late fees are the least of your worries. The interest rate on your card could increase to a very high penalty rate due to a late payment so you'd pay more interest for years. Late payments also reduce your credit score, leaving you unable to borrow or stuck with high interest on any loan you take.

To avoid late payments, write the deadlines for all your bills on a calendar you review regularly. Better yet, automate payments of at least the card's minimum balance and preferably more. If you set up automatic payments, you'll never be late and won't have to think about it.



A pile of multicolored credit cards

8. Unclaimed credit card rewards

According to a recent Bankrate survey, around 3 in 10 credit card holders don't redeem credit card rewards they've earned. While this may not seem like a big thing, these credit card rewards could be turned in for cash or miles so you don't have to spend money on flights.

To make the most of your credit card rewards, choose a card that offers perks that suit your lifestyle. If you have a travel card but never leave home, switch to a different one that offers gift cards on groceries or a statement credit. Read the rules for when you can claim and do so as soon as you're allowed, as credit card points don't typically increase in value the longer you hold them. 



Discount voucher coupons.

9. Unclaimed rebates

According to Consumer Affairs, more than $500 million in rebates go unclaimed every year. If you've bought a product with a rebate and not claimed it, you've wasted money you could have obtained -- and played into the company's hands since they don't have to pay out.

To get your rebates, follow the directions for redemption carefully. Make copies of all of the documents you submit and keep them in a folder until you've received your rebate. Put a note on your calendar of the deadline for the rebate to be delivered and call to follow up if it doesn't come when expected. 



A 1040 form and tax refund check.

10. Unclaimed tax deductions and credits

The IRS owes Americans more than $1 billion in unclaimed refunds. If you haven't sent in tax returns when you're owed a refund, you have three years from tax date the year your returns were due to submit your 1040 form. There's no penalty associated with a late return if you're owed a refund, so don't be afraid to file past returns to get your money.

Even if you've sent in your returns, you may have overpaid if you didn't claim all your credits and deductions. Taxpayers routinely forget to claim tax deductions for things like state sales tax in states where no income tax is imposed; charitable contributions made out-of-pocket; moving expenses or childcare.

Use an online tax program or work with a tax professional to avoid missing out on tax breaks and be organized about saving receipts so you'll be able to identify and claim all the breaks the government gives you. 



A woman and man stand between two cars on a showroom floor.

11. Rental car insurance

Rental car insurance could cost as much as $20 to $40 daily depending how comprehensive the coverage.  Whatever it costs, it's almost always unnecessary. Your own auto insurance likely covers you while driving a rental car and most credit cards also offer rental insurance as a cardholder perk.

Before you pick up your rental vehicle, call your insurer to find out if you're covered and check with your credit card provider. If you don't have coverage on your card and rent cars often, consider getting a card that will insure you. 

ALSO READ: DO I Need Rental Car Insurance?



An airplane decoration made in the top of a latte alongside a map and travel tickets.

12. Airline fees

In 2016, airlines charged Americans an estimated $7.1 billion in fees, according to reports from the Government Accountability Office. GAO also found if customers paid for at least one checked bag, they ended up paying more on average than consumers who flew on an airline that didn't charge extra for luggage.

To keep costs as low as possible, opt for airlines that don't nickel and dime you. Read fine print and compare total costs after added expenditures to ensure you get the best overall deal. Weigh your luggage to make certain you won't get hit with overweight baggage fees and, if you travel often and regularly get stuck with fees, look for a travel credit card that reimburses them as one of their cardholder perks.



Woman in a row in yoga class.

13. Memberships you aren't using

The average monthly cost of a gym membership is around $58. This is a lot of money, especially when there are options for free exercise including workouts at home. While paying for the gym might be worth it to get healthy, the vast majority of gym members -- around 67% -- don't actually use their membership.

It may not just be gym memberships you no longer use. You might subscribe to a magazine you don't read or be paying dues for a club you no longer participate in. Sometimes, it's easy to forget about membership fees if they're auto-paid, so check your credit card statement to find recurring costs for memberships that don't add value. Ask yourself if the money you're paying  is actually worth it and, if not, cancel ASAP. 



Hands hold a cell phone.

14. Cell phone service you don't need

In 2016, the average household in the U.S. spent $1,074 for cell phone service. While you probably feel like you need a phone, ask yourself whether you really need the services your current plan offers.

If you're not a regular phone user, a pay-as-you-go phone where you buy minutes without commiting to an annual contract could be your best bet. Discount providers also offer good service in many situations, but read reviews before signing up.

Whichever company you choose, check your bill to see if you're paying for unnecessary services. If you don't use all your data, drop to a lower-tiered plan or if you haven't texted since your kids moved out, drop the texting package. 



Woman talks on her landline phone.

15. Landline phone service

Do you still have a phone at home that isn't wireless? Basic phone service for a landline runs between $15 and $30 monthly, If you have a cell phone already, you may not need to pay for a landline. If you need a phone in your home, look into VoIP services.

VoIP systems work by tapping into your phone's Internet, and can be much cheaper. In fact, the annual cost of VoIP service could be comparable to what you pay per month for your landline. 



Three young men watch sports on a TV.

16. Cable TV

These days, there are constant headlines about cable and satellite subscribers losing a record number of customers.

There's a reason for this. In 2017, average cable bills were just over $100 per month, and most cable and satellite providers estimate bills will be rising in 2018. Paying for cable is simply not worth it, especially when there are so many affordable streaming services that offer programming options including sports and local channels. 

ALSO READ: Is the Trump Administration on the Side of Cord-Cutters?



A laptop with mini movie seats on its keyboard.

17. Streaming services you don't use

Speaking of streaming, have you optimized your subscriptions to streaming services or are you paying for more than you need?

Sixty-two percent of HBO Now customers and 61% of Hulu subscribers pay for Netflix as well. While there may be valid reasons for signing up for multiple services -- and doing so is usually cheaper than cable -- you don't want multiple subscriptions unless you're actively watching. Instead, choose the streaming service best matched to your viewing habits.

It's also easy to suspend your account with streaming services, so consider subscribing to one for a few months to watch original programming and then changing to another. 



Hanging lightbulbs that are lit up.

18. Phantom electricity

Look around your house. Do you have a fully charged phone plugged in, a coffee machine and DVD player with blinking timers, and a video game system powered up and ready? If you do, you're not alone -- but you're losing money as we speak thanks to phantom power.

Phantom power is power devices use when they're plugged in but not actively being used. As much as 25% of all residential electricity is used to power devices in idle mode, according to studies by the Natural Resources Defense Council. This adds more than $19 billion to Americans' electric bills.

You can save your share by unplugging devices and using a power strip you can quickly switch off and on for your entertainment system. If the devices aren't in use, flip the switch so they stop taking money out of your wallet.



A smart thermostat set on 68 degrees.

19. Heating and cooling

According to the Department of Energy, 45% of the average household's energy bills are devoted to home heating. Unfortunately, a lot of that money is wasted due to Americans using older, energy inefficient heating systems or living in drafty houses.

Upgrading to an efficient system could save you money over time, especially if you're eligible for tax credits or incentives from your state government or power company. Caulking to seal cracks around windows and adding extra insulation could cut your bills as well.

There's also another simple, quick fix: turn your thermostat down or up depending on the season. The Department of Energy advises you could save 10% of heating and cooling costs by turning your thermostat back 7°-10°F from its normal setting for eight hours daily when working or sleeping. A programmable thermostat makes this automatic so installing one can pay off. 



Man standing in a fresh business suit.

20. Dry cleaning bills

Businesspeople spend an estimated $500 to $1,500 on dry cleaning annually, according to reports from First Research and combined revenue of dry cleaning and laundry services in the U.S. exceeds $20 billion.

If you want to stop spending on dry cleaning, your best option is to buy clothes that don't require it. There's ample business attire designed to be wrinkle-free and washed at home. If you must buy dry cleanable items, determine if you can hand wash them or look into home dry-cleaning kits that allow you to DIY the process. 



Young couple uses washers at a laundromat.

21. Costly laundry care items

Did you know washing clothes using the most expensive methods could cost more than $600 annually if you wash 400 loads a year? This cost is based on using hot water in a top loader, using premium detergent, and drying clothes in an electric dryer. By line drying, washing on cold, and using a low-cost detergent, you'd cut costs in half.

There are also plenty of other ways to save. Make it a habit to wash only full loads so you aren't running the washer more than you need; clean laundry lint filters regularly so your dryer operates at maximum efficiency; and avoid over-drying clothing. You can also skip the fabric softener and still get soft clothes by using a vinegar and essential oil mix or wool dryer balls. 

ALSO READ: Here's How Much You Might Save by Working From Home



Woman does her make up in a mirror.

22. Pricey personal care items

In 2016, the U.S. cosmetics industry earned around $62.46 billion in revenue. Americans are spending a fortune to look good, and they may not need to.

Drug store beauty products are often as good as fancy makeup brands, and it's actually quite easy to make homemade shampoo using water, a vegetable-based liquid soap, vegetable oil, and essential oils. That's healthier than most store-bought brands, and will make your hair look great. 



Pink disposable razors.

23. Disposable razors

The most expensive disposable razor for women at CVS is $13.99 and the most expensive cost for a men's disposable razor is $15.99. Not only is it expensive to use these disposable products, but it can also be wasteful. In fact, Americans throw away an estimated 2 billion disposable razors annually.

Straight razors are a lower cost alternative that, while it may take some getting used to, can be much less costly and provide a better shave. You can also opt for lower cost alternatives such as coconut oil instead of buying pricy shaving creams that may have chemicals that aren't good for your skin anyway. 



Young couple picks out cleaning products in a store aisle.

24. Unnecessary cleaning products

The average American spends around $42 on cleaning supplies every month. Many of these products, including single use wipes, are unnecessary. Some even contain harmful chemicals that compromise indoor air quality. 

You don't have to buy these products. Instead, opt to make simple inexpensive cleaning products with household products such as vinegar, table salt, baking soda, dish soap, and water. Using newspaper to clean glass surfaces is another free and easy alternative to Windex wipes, and you can opt for cloth rags instead of paper towels. Automotive rags are very inexpensive, absorbent, and durable to tackle any cleaning job. 



Clothing on hangers on a rack.

25. Clothing

While you obviously need to be dressed, you don't need to spend a fortune on clothes -- even if you want to look great. Consider shopping consignment stores and thrift stores to get affordable items and buy clothes that are classic, rather than on-trend, so you don't have to constantly upgrade your wardrobe. Also consider a clothing swap with friends -- everyone brings a piece of clothing they don't wear any more to trade -- as an alternative to shopping.

It can be especially beneficial to save on formalwear you only end up wearing once. Looking nice on formal occasions feels great, but not if your outfit costs you hundreds that could be better used. There are plenty of options for renting formal dresses to look nice on a budget. A clothing swap or shopping consignment would also work very well for these purposes, as many people have very gently used formalwear to part with. 



A woman holds a basket of fruit.

26. Food you don't eat

The average American family throws out $1,365 to $2,275 in wasted food every year, according to the National Resource Defense Council. If you invested that $2,275 instead every year for 30-years and earned a 7% return on investment, you'd end up with almost $215,000.

If you're not OK with throwing away so much money, make a plan to avoid food waste. Create a weekly meal plan specifying what you'll eat and buy only ingredients you need. Avoid complicated recipes where you need to buy large quantities of items you'll use a small portion of, and don't assume that just because something hit its expiration date that it must be thrown out. Plenty of foods are still good for days, weeks, or even months after the sell by date.

ALSO READ: Here's How Much the Average American Wastes on Food



A young couple checks out at the grocery store.

27. Convenience foods

Have you ever bought pre-cut carrots or pre-washed lettuce? What about prepared meal kits? The more prep work done to food before you buy it, the bigger the cost. And this cost can be more substantial than you'd expect. 

A blogger at Simple Dollar compared prices and found you pay $2.90 more for a pre-washed bag of lettuce compared with just buying the lettuce head. Washing lettuce takes around three minutes. If you buy one head of lettuce weekly, you'd spend around 2.6 hours washing lettuce annually but would save $150. Your hourly rate is around $58 tax-free.

And this is just one of many examples of convenience items, which can be bad for your wallet and also for the planet because of all the packaging. Accept a little inconvenience to reap big savings.  



A man and woman prepare fresh produce.

28. Single use kitchen appliances

Do you have a rice maker? An egg boiler? A toaster and a toaster oven? A food processor and a chopper? A fondue pot? Listing all the single-use kitchen appliances you can buy would take far too long, but you get the idea -- there's an almost endless number of things to buy to do kitchen tasks.

The problem is, these cost money and you need space to store them. And, they're mostly unnecessary. You can make rice, eggs, and fondue all in one basic pot -- you don't need a $20 plus gadget for each food you cook. 



Cans of cold beverages.

29. Alcohol

Around 37% of households spend money on alcohol, with average expenditures totaling around $970 per year for households that imbibe, according to Value Penguin. Cutting back on drinking could help you save on costs, avoid empty calories, and potentially be healthier.

If you aren't ready to forego drinking, consider seriously limiting how much you drink at bars and restaurants and having wine or beer at home instead. Or, meet your friends for happy hour and drink beers on tap instead of opting for pricey cocktails. 



Soda being poured into glasses.

30. Sugary beverages

If you had to guess which food item was the item Americans spend the most money on, you probably wouldn't guess soft drinks. But, a 2016 report from the U.S. Department of Agriculture reveals Americans are in fact spending more on soft drinks than any other food item. Sugary beverages, including energy drinks, sweet tea, fruit juice and carbonated sodas account for a whopping 7% of the grocery budget of American households.

Buying these sugar-sweetened drinks isn't only bad for your wallet, but it can also lead to costly and dangerous chronic conditions such as obesity and diabetes. The good news is, there's absolutely no reason to buy these drinks.

Plain old water is a great way to quench your thirst, or make flavored drinks at home using an inexpensive teabag and natural sweetener. Your wallet and waistline will thank you if you give up sugary drinks forever. 



A row of bottled water.

31. Bottled water

If you bought a single 16.9 ounce bottle of water every day and paid $1 for it, you'd pay $365 in a year. Consumer Reports ran the numbers and found you could fill a 16.9 ounce bottle of water with tap water for around $0.48 over the course of a year. It goes without saying $365 is a lot more than $0.48.

While tap water is far cheaper, Americans still choose the bottle, spending around $16 billion annually. There's no need to spend so much on a drink that's practically free when you can buy filtering water bottles or a filter for your sink. By filtering your own or drinking straight from the tap, you can save hundreds of dollars a year and do something good for the planet at the same time. 

ALSO READ: 30 Eco-Friendly Products That Will (Eventually) Save You Money



A waitress carrying plates of food.

32. Lunches at work

Americans spend over $3,000 annually on dining out, according to the Bureau of Labor Statistics. You could cut out all these meals and eat at home, but that's not always realistic if you enjoy a restaurant meal. However, there's a simple change you can make without altering your quality of life: bring your lunch to the office.

Bringing your lunch to work doesn't mean giving up time with family dining out. You can easily bring leftovers if you plan ahead and make a little extra, or a nice sandwich and some healthy fruit is a quick and easy lunch. If you buy $10 lunches each working day, you'd spend around $2,600 each year. Brown-bagging it would give you a lot more money in your pocket. 



A red carton of french fries.

33. Vending machine and convenience snacks

Speaking of snacks at work, do you grab food from vending machines? Do you pop into the gas station for a soft drink and a bag of chips? Many Americans do on a regular basis without thinking about it, but the costs of this convenience add up. In fact, the vending machine industry is around a $30 billion annual industry in the U.S.

You can enjoy snacks much more cost-effectively by being prepared. Buy chips, fruit snacks, or your preferred snack food in bulk and keep it in your desk or vehicle. When you're hungry, you'll have a low cost option available. In an ideal world, you'd make your go-to snack a healthy one, but if this means you won't eat it and will end up buying chips, stock up on the things you love. 



A pill case full of different colored and shaped pills.

34. Supplements

Spending on supplements exceeds $30 billion annually, which equates to around $100 per year for every person in the U.S. All this spending may not be doing anything to improve health, as many studies show supplements do little or nothing to improve your well-being.

Supplements could actually be harmful if you believe they're a substitute to healthy eating. Instead of wasting money on vitamins produced within a largely unregulated industry, opt to eat a healthy, balanced diet. This should provide the vitamins and minerals you need. 



The appliance section inside a retail store.

35. Extended warranties

These days, it seems like every product you buy comes with an extended warranty. Salesmen often push these warranties, especially on big ticket items such as cars, because warranties provide a handsome profit.  Unfortunately, more often than not the warranties are a waste of money.

Warranties may be difficult or impossible to use due to fine print, exclusions, and deductibles. The warranty may cost more than you'd spend to replace the item, or could overlap a free manufacturers warranty so you'd be paying for redundant coverage.

Because there are so many problems with extended warranties, most financial experts advise consumers to just say no. Instead, put the extra cash you'd spend on a warranty into an emergency fund to cover any repairs that do crop up. If issues don't arise, you can keep the money for a rainy day. 



Fluid being added to a car's engine.

36. Simple car repairs

Did you know you can buy new brake pads for around $20 to $40 depending upon the make and model you need, but it costs around $300 to $1,000 to have a mechanic change the brake pads for you. The process essentially involves removing the wheel and hardware, taking toff worn pads, installing new pads and putting the hardware back. There's lots of online tutorial videos to show you how and it can be done more quickly and easily than most people imagine.

Not comfortable dealing with your brakes on your own? You could also easily DIY a battery or oil change, a headlight or taillight replacement, or a replacement of your windshield wipers. Spending money on simple fixes you can do at home is a major waste, especially if your vehicle ends up with an untrustworthy mechanic that sells you a lot of unnecessary services.  

ALSO READ: The Definitive Guide on How to Manage Your Money



Person taking a car key through car window.

37. Car loan payments

In the last quarter of 2017, Americans owed a total of $1.22 trillion in auto loan debt, up $8 billion compared with the prior quarter. Americans are taking out bigger loans than ever before and are stretching out repayment terms. In fact, the average auto loan topped $30,000 in 2016 for the first time, according to Experian. The average monthly payment also reached a record high of $503 -- the first time it's ever exceeded $500 -- and the average loan term stretched to a new record of 68 months.

The costs of your auto loan could make it impossible to save enough for retirement, especially since many people upgrade to a new car as soon as their old loan is paid off.

Instead of getting trapped in a cycle where you have vehicle debt for life, buy the most inexpensive used car you can. Pay the loan off ASAP and continue to save car payments in a savings account. Keep driving your old used car as long as possible and hopefully by the time you need a new vehicle, you'll have the cash to purchase one with no loan at all.

Repeat this process, driving your car into the ground and saving your “car payments” until you have enough to buy your next car. Once you've got enough, continue driving your current car until it's no longer possible and redirect those car payments into your retirement fund. 



Distraught man standing in front of his wrecked vehicle.

38. Overpriced auto insurance

In 2016, research from Insurance Analytics Company ValChoice revealed Americans overpaid for auto insurance to the tune of $101 billion over the prior five years.

You may be overpaying if you haven't taken advantage of discounts that come with being a safe driver or aren't bundling car insurance with your home or renter's insurance.

Also, make sure coverage is aligned with your needs. If your car is old and not worth much, maintaining collision coverage may not make sense. If you work from home and rarely drive, let your insurer know as there's often a discount for driving fewer miles. 



View from a rearview mirror.

39. Speeding tickets

Around 41 million speeding tickets are issued in the United States each year, with the national average cost of a speeding ticket ranging between around $115 and $135. The initial fine is bad enough, but ongoing costs are worse. Your car insurance could go up around 18% after a first speeding ticket and could rise as much as 34% if you get a second violation. You could pay higher insurance premiums for years. 

Avoiding this one is easy -- just don't speed. Driving the limit is also safer and helps you to get better gas mileage. 



Three lanes of traffic at a standstill.

40. Operating an inefficient vehicle

Car sales are falling and truck sales are rising, so much so that Detroit carmakers are killing off sedans and increasing SUV production. Bigger cars are, of course, less fuel efficient -- and fuel efficiency is likely to get worse instead of better as the EPA rolls back regulations that would've required cars to become more efficient by 2025.

Annual costs per mile of bigger vehicles can be much higher than costs of electric cars or smaller options, not just because of gas but also due to maintenance and repairs. In fact, AAA reports the average cost of a small sedan was around $6,354 in 2017 and the average cost of a small SUV was around $7,606. A medium SUV, on the other hand, would run you around $9,451 to operate while a pickup would cost $10,054 per year.

If you need a huge SUV or a pickup truck for work or because your family is very large, you have no choice. But, for most American families, opting for a smaller car is a far better value proposition. 



A person pumping gas into a car at a gas station.

41. Wasted gas

It's not just buying a big car that causes you to spend more on gas. Most Americans do things that make their vehicles operate less efficiently than they should.

For example, did you know a typical car with a four-cylinder engine that gets an average of around 30 miles per gallon while traveling at 60 MPH could end up with gas mileage as low as 20 MPG by driving 80 MPH instead.  The aerodynamic drag that occurs when speeding increases exponentially, accounting for the big drop-off in fuel efficiency.

Driving with lots of cargo or failing to change your car's air filters also make your gas mileage much worse, meaning you end up spending more to gas up your vehicle. 

ALSO READ: Rising Gas Prices May Finally Taper Off



Stacks of freshly produced cigarettes.

42. Cigarettes

As of 2015, 36.5 million adults smoked cigarettes in the United States, according to the Centers for Disease Control and Prevention. They're all spending thousands per year on cigarettes -- not to mention incurring other costs including health expenditures from smoking-related medical issues.

Annual costs of smoking vary by state, but out-of-pocket expenditures range from $1,650 in North Dakota -- the cheapest state to smoke -- to $3,811 in New York, which is the most expensive according to WalletHub. There's no reason to incur these expenses, especially since smoking is so bad for you. Instead, make a commitment to quit.

Get help from smoking cessation programs -- your insurance may cover the costs -- or transition to a nonsmoker using e-cigarettes. Just don't use the e-cigarettes any longer than necessary, as these can be expensive and unhealthy as well.



Lottery number balls.

43. Lottery tickets

Around half of all Americans play state lotteries, according to a 2016 Gallup poll. While spending a few dollars to try and win millions may seem harmless, costs add up. In fact, spending on traditional and electronic lottery tickets tops $80 billion annually, according to the North American Association of State and Provincial Lotteries.

This spending simply can't be justified given the odds you'll actually win. Instead of wasting money in the hopes a ticket will make you a millionaire, save your cash and you're guaranteed to end up richer. It's often said lottery tickets are a tax on people who can't do math, so don't be one of them. 



A young couple holds a newborn.

44. Unnecessary baby expenditures

According to Nerdwallet, a household making $40,000 per year could spend up to $21,248 on a new baby during the child's first year. While some of those costs are for essentials such as diapers and daycare, other expenditures are a big waste of money.

When you bring a new bundle of joy home, you're probably tempted to buy everything you've read about on baby websites. The reality is, however, babies have historically been fine without a lot of the stuff today's parents think they need.

Fancy nursery furniture, baby shoes your child will never wear, and a large wardrobe your child will quickly outgrow are a few of many ways parents toss away money they'd be better off putting in a college fund.



Two young girls use their cell phones.

45. Tech gadgets

By now, you've likely heard Apple's newest phone has a $1,000 price tag. Even if you opt out of the iPhone X, average prices on smartphones have risen across the board, with a 7% year-on-year price increase worldwide in the third quarter of 2017, according to GFK.

Despite rising costs, around 44% of consumers upgrade their phone around once every two years and around 2% upgrade as soon as a new model becomes available, according to Gallup polls. 

And an iPhone is just one of many tech gadgets consumers constantly upgrade. You may feel you need the latest tablet, e-reader, video game system, or other electronic device -- but buying all this technology is a big drain on your budget.

Instead of opting for the newest and most expensive model, an older refurbished item would come with a full warranty at a fraction of the cost and leave you with a lot more money -- especially if you don't upgrade for a few years. 

ALSO READ: You Won't Believe What the Average American Spends on Impulse Buys



A woman carries several shopping bags.

46. Impulse purchases

The average U.S. Consumer wastes as much as $5,400 per year on impulse buys, according to a study conducted by Slickdeals. As many as 1 in 5 purchases consumers make are impulse buys, and unplanned purchases span all categories from takeout to shoes to groceries to clothes and household items.

Avoiding impulse buys is tricky, but there are proven ways to stop wasteful spending. One of the best approaches is to avoid shopping while hungry. This includes all shopping, not only buying groceries, as a study from University of Minnesota’s Carlson School of Management revealed hungry shoppers spent 64% on non-food items than those who were full. Hunger makes you want to acquire, so you'll buy whatever's available.

Instituting a 24-hour rule before making a purchase is another way to curb impulse buys. Also, try deleting stored credit card information from your online accounts so you have to work much harder to make a purchase. 

ALSO READ: You Won't Believe What the Average American Spends on Impulse Buys



Woman shops from a clothing display.

47. Name-brand items

Generic medication can cost as much as 80% to 85% less than name brand drugs, despite the fact the generic version is required by the FDA to be the same as its pricier counterpart.

Other generic products save you a surprising amount as well. In fact personal finance site Three Thrifty Guys, did a head-to-head comparison of 16 food products and found buying brand names cost $56.24 compared with $41.51 for store brands. It's often hard to tell the difference, so you could realize this $14.73 in savings without any decrease in your quality of life.

If you save the equivalent every week, you'd have more than $765 at the end of the year. And most families buy more than $56 of groceries weekly, so savings will likely be even greater.



A man uses his cell phone intently.

48. In-app purchases

“Free” mobile games could end up costing you more than you realize if you make in-app purchases. In fact, according to Slice Intelligence, those who made in-app purchases spent an average of $87 on mobile games over the course of the year.

Games aren't the only things app users are spending on. Those who use mobile devices routinely spend on apps related to sports, social networking, news, productivity, music, health, and fitness.

While it's easy to click the button and make a buy -- especially if your credit card is linked to your account -- refraining leaves you with more spare cash for other things. Isn't retirement more important than advancing in Candy Crush?



Rolls of cash wrapped in red ribbon.

49. Unnecessary gifts

One survey of 2,000 Americans revealed 53.5% of gift receivers got at least one unwanted present during the holiday season. The average cost of these unwanted items was almost $50, which means Americans collectively wasted about $16 billion on bad presents.

Unfortunately, people are going into debt to buy unwanted items. In fact, Magnify Money found consumers who went into debt were left owing an average of $1,054 in the 2017 holiday season.

Much of this wasteful spending could be avoided by taking a different approach. Talk to your friends, family, and office buddies about doing a Secret Santa instead of a gift exchange, or better yet, everyone could get together for a nice meal to celebrate and forego gifts altogether. While you'll likely still want to buy for the children in your life, most adults don't need anything and gift giving and receiving turns into a burden for everyone involved. 



Rows of colored batteries.

50. Batteries

Americans toss around 3 billion batteries into the trash each year, according to the Environmental Protection Agency. If you have kids, you're probably using a lot of batteries to power toys. You may also be using batteries for electronic devices, portable audio equipment, games, and gadgets.

If you're a frequent battery user, investing in a set of good rechargeable batteries could save you from spending on products you throw into the trash. Like many of the items on this list, that's good for your wallet and a great thing for the earth. 

ALSO READ: 4 Reasons You're Not Saving Money



A woman smiling holding a large piggy bank.

You can save thousands by avoiding waste

So, how many of the items on this list apply to you? If you're like most Americans, probably a lot of them.

The good news is, awareness of your bad spending habits is the first step towards making a change. You can make the decision today to stop wasteful spending, be more purposeful about what you buy, and put your money to work on things that matter. 

Christy Bieber has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple and Netflix. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.



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